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tv   Squawk Alley  CNBC  November 29, 2017 11:00am-12:00pm EST

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i2%n early trading. at&t's move comes after it filed a response to justice department's objection to time-warner. that does it for this hour of "squawk on the street. send it back to "squawk alley" at the new york stock exchange back to you guys. >> thanks. at snap headquarters in venice, california 8:00 a.m. on wall street and "squawk alley" is live good wns morning welcome to "squawk alley." i'm carl quintanilla thanks for being with us joining me roger mcnamee,
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co-founder, welcome to you busy day, good day to have roger on the set another record setting day on the street biggest gain for stocks on tuesday. rally being driven a lot by tax reform optimism. bitcoin stealing some part of the story surpassing 11 k less than 24 hours after breaking 10 k. it has backed off that price we're learning nasdaq is reportedly planning to launch bitcoin futures in the first half of next year. that's according to dow jones. there is a lot to tackle roger, bitcoin news rortation between sectors as people watch this tax bill advance. what's the lead for you. >> to me the bitcoin thing is a phenomenon at this point it's really hard to know what to say. what do you do when the thing is going up 10% a day, whole asset class going up 10% a day, you're obviously not doing this on fundamentals there's a lot of enthusiasm
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here to me what really matters is where does it land what role is it going to play in the economy going forth, because it's clearly worked brilliantly as a tradeable commodity now the question is, can they make it more than that can they make it into something that's an exchange. >> who is they >> important question. i'm involved in a company where there has been a lot of malicious attacks on their software bitcoin is the way perpetrators maple ta maintained their anonymity clearly commercial uses are not the ones you're looking for if you want this to become a big deal i mean, i've never seen anything like this. >> does it remind you of anything else? >> no. because it's a whole new asset class. in that sense, no, i've never seen. >> you called eight commodity earlier. it's not just commodity, technology, currency. >> there are a lot of things
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going. but bitcoin is a commodity obviously underneath it you have a technology that has hopefully a lot of applications. >> you know what it reminds me of, dot-com in the late '90s just dot-com there was the internet underneath it, like a real world changing technology, and there were some dot-comes actually worth something, amazon. talking about those. there was, web band i'm getting my facebook feed blown up with every day people asking what about bitcoin right as i'm seeing the price go up. i worry for people getting in. >> in that sense it looks just like dot-comes, but because it's a new thing, there isn't any infrastructure past experience to evaluate how far is too much. >> just like dot-comes. >> yes, but they were stocks
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mechanisms for doing trades and those kinds of things were inside a framework we all understood there were places you could go to either get out of the way or to hide out. you know, i look at this thing, and i may be wrong, john, but from where i sit, this is its own phenomenon so at this point i would make no bet at all about what happens next, you know it's gone a lot further than the bears would ever have imagined i think it's probably gone further than some of the bulls would have imagined. you know, as far as i can tell, it's like the market is going to make a choice here and i'm not going to pretend like i'm the one who knows because i sure don't. >> even though 2% of the population odni bitcoin, this is something you think is important enough for us to be talking about? >> i look at it because everything on wall street is at the margin looking over its shoulder and wondering what bitcoin is going to do when you see goldman sachs and nasdaq all putting their strategies to try to embrace
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this thing. >> figure out derivatives to play in the market. >> that is a big deal. >> is it a big deal because it's going to provide momentum or a big deal because frankly if there's more of an efficient market in this thing and people are able to predict where it's going to be and short it, it could put some downward pressure, besides the upward pressure in scarcity. >> there's a third thing that i think is the real goal of those two organizations, which is bitcoin right now is completely decentralized. >> before we go on, let's get sbos into 20th century fox admission. >> it's important, perspective from the outside looking in around any allegation, more investigation than the company that certainly we've lived this for the last year and a half the fact set of these allegations, whether there's been harassment or not can be very different in very different
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cases, which the headlines don't always show. so a harassment case or claim against one person, one situation versus someone else might be a completely different situation. it also might be much more difficult for a company to act on presumably here in nbc's case they have had actionable information they were able to move quickly i think you've got to commend them for that. it's a trick sign to see the companies moving that quickly to eradicate, if that's ever possible, we hope it is, sexual harassment in the workplace. with fox news, for instance, it took us 13 days from the time we had the first -- we learn of the first allegation with roger ailes until we walked him out of the building i'm not sure when nbc first -- we don't know when nbc first heard the allegation but 13 days by historical standards removing a ceo of a business i think is a pretty good track record. >> and with bill o'reilly, it
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seemed there was a private settlement he was allowed to continue have things changed around that. >> what happened for us is that, again, have you to look at the facts. the fact set around roger ailes and bill o'reilly appeared very different and still are factually different. with -- with roger ailes what we were able to do, go in, hire an independent law firm, sorry, outside law firm to work for us, work for us and go in and investigate all the allegations, which included speaking to the women involved, corroborating their stories, getting firsthand corroboration from when the harassment claims happened, really very rigorous investigation where we were able to talk to our employees and gain the fact that we needed to
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act upon that. with bill o'reilly, it was very different in that they were private settlements that happened in the past the company had never had a complaint. the private settlements included anyone not talking about it. so we had a complete inability to dig into the story and find out what had actually happened once, however, these things became public, and we were aware of them, what we were able to do is change the contract if there were any further allegations that arose, we could fire him for cause immediately, which is what we did. >> and fox and more generally is it now no longer okay that someone could have a private settlement where there are gag orders on the other side and still stay at work is that the company's business >> yes that's what it should be you should not have situations where -- we do as well this is the disappointing, we
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have very strong hr departments, global head of hr. the local hr departments in these situations don't talk to local management basically straight up to the senior management ultimately if the situation looks serious, my brother or myself we also have hot lines throughout the company we have a number of anonymous hot lines for complaints or for people if they want to go on the record with us about a complaint. so these are important mechanisms that you need people to trust and to use so that we can then act on that if people don't use that, it's very hard for the information to filter up that we can take advantage of. >> let's take about other recent news i met an executive who worked with you and the family and company for a long time. >> henry, i think the fundamental things, the headlines and these are juicy media stories, it's so
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important, a very good year because it is completely unacceptable for men -- particularly we're seeing powerful men to have and allow or engage in harassment in the workplace. the fact that we've gone through this sort of cathartic moment, not just the media but we see through all of society and business and elsewhere i think is a tremendous thing. i think we come out of it as a community far, far stronger. >> here here other news, saw a friend, former executive of the company he said, i never, ever thought that the murdochs would ever consider selling anything. how here we're reading you may sell half your crown jewel, the company, what's changed? >> talking about our children. we both have 13 years old. my 13-year-old was telling me the other day the one thing he's disappointed with going into middle school was the school quartered gosse -- yard gossip.
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a lot of rumor and speculation gets out there that aren't necessarily true the advice to him and myself, let's not feed that speculation. that's been a london standing policy of the company. we're not going to talk about stuff bubbling out in the media and for the hollywood hallways but the reality is, what this has caused, speculation we might ever sell a part of our business, this has caused a debate in the media. when i look, i've said on stages the last couple years. absolutely there are some scale businesses in media today, which will be the losers going forward in a digital world that's the case. if you haven't invested in your
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programming and channels, you haven't invested in sort of distribution platforms, you are unlikely to get on the new digital services and you'll struggle we don't believe we're in that situation. we can demonstrably point, maybe the only company growing, large media growing because of our mix of younger cable channels. we feel very -- we'll talk about it more in a minute. we feel very strongly where we're positioned to grow the company. >> and yet, it is the job of analysts and others to evaluate schoolyard gossip, as you put it one of the very strong media analysts said about the reports that you might sell half of 21st century fox. this makes immense sense so if we go the other way on
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that, if you don't sell them, the analyst will say it makes less sense can you shed some light on what he's seeing? two reports. so reports are you're considering selling, sky, satellite control pay tv in the uk, "national geographic," fx, film and tv studio, hulu, keeping fox sports, fox news and fox broadcasting hypothetically, what would be the reasoning there? why would that make immense sense. >> again, i'm not going to comment on exact speculation, but what's happening -- you are -- the reason the analysts are saying in the industry is if you look at what's happened w h digital as cable universe declining, around overall and traditional cable, 2, 2 1/2%
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if that continues, obviously cable affiliates are one of the key drivers for the big american companies. little bit left for us because we have a big international business but u.s. business is a very important area of revenue so what's happening, though, the new digital of the youtube, tremendous service, hulu live service, dm -- >> that's loachlan murdoch commenting on termination of matt lauer on nbc, declining to speculate about asset sales. he says the speculation itself has caused a debate around scale in the media speaking of media social snap down snapchat writing op-ed for axios, and he slams social media rivals for fake news rough illusionized the way people share and consume content. let's be honest this came at a
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huge cost to our fax, minds and entire media industry. that's the same day they roll out a new redesign this is speigle reviewing the changes. >> we're separating social from media and reorganizing snapchat around relationships to make it personal we hope it feels more familiar, inspires you to express your self with your friends and explore content you love. >> roger mcnamee still with us on set you've been critical with the way they have altered the flow of information is this a first fix. >> i think it's a step in the right direction. first of all, i think it's a really smart, strategic move for evan spiegel to focus on, try to drive a wedge on this issue. facebook and google are extremely vulnerable because of filter bubbles and this notion they manipulate the thts of their users the way they present information. in fairness s.n.a.p. is not free
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of blame s.n.a.p. streams exploit the same basic problem in order to sell ads, the strategy is to addict your audience once you've addicted them, you want to find ways to manipulate their behavior. >> in fairness, that's the media business everybody who is putting something on tv or on a phone wants their audience to want more of it. >> the difference is that on smart phones the people who have personal data, who can essentially program individualry for 2 billion members have advantage and power to do great deal more harm than broadcast network can do my simple point, it's a matter of degree jump but degree matters. when i look at s.n.a.p., you know, i hope this is the beginning of them defending themselves more aggressively they are in a position to get benefits from the government because there's no question that facebook and google are doing
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things that are contrary to the public interest, right, that's now been validated by a lot of data there's at least some evidence as revealed by pro publica facebook in particular has been resistant following through on its program toss reform itself i think if spiegel starts to stand up for users this way and really is committed to that notion, again, i don't think fake news is a real problem. it's a system like everything else it's a place to start and it's a place he can start. >> is standing up for users what's best for business is that really what -- isn't that you what want, if you're a snap investor. yes, take care of your consumers but you've got to make money, figure out a way to make this platform profitable. >> you're right. the issue for facebook and google they are becoming stock toxic. facebook in particular risks being viewed like a tobacco company. it addicts people, harm.
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vulnerable to youtube kids, vulnerable to things on facebook. >> snapchat -- have we already forgotten how snapchat got popular? >> snap streaks are one of the biggest offenders on that very issue. so he does have issues around this, but as a shareholder i want him fighting back against these people, taking whatever weapons oes he weapons. he's david against goliath he's going to get crushed if he doesn't use every weapon available. i don't know if this is going to work but it's better than sitting back and letting facebook copy everything >> it's hard to judge the price action because it's such a bad day for tech in general. >> it is but it's the right move no matter what the price tells you today, strategically he's got to get aggressive, he's got to get very public he needs to separate himself from the other guys. by the way, google needs to do the same thing relative to
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facebook google took one point million -- 150,000 youtube kids videos down the other day in response to the protest there. google can find a way to separate itself from facebook, then all of them look relatively better strategically as a shareholder, you want alphabet, you want these guys to separate themselves from facebook because facebook right now is still behaving very badly. >> roger, it's good having you. >> always a pleasure to be here and fun to listen to lachlan sit there and talk about -- >> what a day. >> have a great day. >> thanks very much. appreciate it. thanks for joining us. janet yellen meanwhile on the hill for what's likely her last congressional testimony as fed chair. let's get to cnbc economics reporter steve liesman on what she's saying steve. >> hey, jon. janet yellen and valedictory
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being praised, vocal disagreements on both sides as often. want tax cut proposal which she would only do to the point current taxes need fixes and capital is a good idea for the economy. democrats want to continue dodd/frank which she is mostly doing, saying it would be a mistake to roll them back. she does support easing them for small and mid-sized banks. economic committee on why interest rates should continue rising. >> we do think it's important to gradually move our policy rate toward what i'll call a neutral level which would be consistent with sustainably strong labor market conditions. we want to do this gradually if we allow the economy to overheat, we could be faced with a situation where we might have to rapidly raise rates and throw the economy into a recession.
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>> on the economy yellen noted it seems to be taking up steam but she said she hadn't seen a lot of ways for inflationary pressure if there's a difference if fed chair nominee powell and yellen it's how far they are willing to go with dodd/frank financial regulations. powell seems to want to go further than yellen indicated she would. they both were asked about the deficit. about they both said u.s. deficit on unsustainable path. seems congress likes to ask fed chair questions and they don't necessarily listen to things they are saying. >> given these tax proposals, it certainly looks that way, steve. thanks so much meanwhile major announcements from amazon at aws reinvent in las vegas, that's where i caught up with aws ceo. aws the most profitable unit at amazon seeing huge growth.
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i asked jassy about the scale, can they become the biggest on the planet take a listen. >> i do think it's possible. it's not really the goal i have or the team has for itself we don't ever really talk about it that way. but our mission is to enable any developer or any company to be able to build all their technology applications on top of our technology app, structure technology platform. it has the chance to be a really large business i think if we're able to accomplish the right type of customer experience and continue to build what customers ask us over time as the market moves more and more toward cloud, i think we have a chance to be the largest enterprise company in the world. >> largest in the world perhaps. with the adoption of the cloud, the question is are companies going to move completely away from their own data centers, this hybrid cloud, private cloud thing? does that have legs?
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here is what jassy had to say? >> i don't know if it's ten years. could be ten years, could be sooner, could be a little later. ten years is a reasonable estimate yes, i think in ten years having your own data centers is going to be a little like -- >> comparing to mainframes, they are still around but not a major part growth segment of tech ecosystem. that's a shot across the bow to dell trying to sell equipment onto businesses, campuses and saying you only pay for that you use. you don't have to pay the whole amount up front. a shot across the bow to microsoft, oracle and others trying this hybrid approach. you don't want to move all to the cloud, we'll help you transition, have our equipment, use our platform on your campus as well. but notice what he said about the potential size of aws. everything is in the cross-hairs
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here for amazon, as we talked about in the last hour, building applications and services on top of that, which can certainly increase profitability and doing more m&a as well. >> people act like it's new. the unit is not new. what is new is the ability for investors to use the size and growth of the unit to help establish valuation for amazon at large that's what's happened in the past couple of years. >> it has. now i think investors are still trying to wrap their heads around the potential size and growth rate particularly when it comes to profits of this unit. they are still focused on the infrastructure angle now they have to start thinking about software and services, because said looking to go there. >> so much for amazon today. also, fund out cyber monday is amazon's biggest day in history, did top prime day, even though 30 hours. >> spoken like a true retail reporter. >> we've got to get that in somewhere. all right, guys. more on bitcoin as the currency makes new record highs and stocks do the same thing as we head to break, let's look
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individual side which to me is not what it needs to be to get the business side as long as we're not increasing deficit. >> we know we'll not be able to go forward until we get 50 people satisfied that's what we're working on >> nbc announcing it has terminated "today" show host matt lauer citing inappropriate workplace behavior varie variety, executive director debra birnbaum good to have you. >> thanks for having me. >> it's awkward for us we're trying to cover it as a news story even though he's a colleague of ours. is variety working on this >> we had been hearing rumors for a while. it really stepped up after the first story broke with harvey weinstein. we've been working on a story. nbc knew about that, got ahead of the action. >> what we have to work with is
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the statement from the head of nbc news can you share anything at all what you've recovered? >> we are still putting it through the process. i can tell you as the memo indicated, this wasn't an isolated incident, unfortunately. >> and debra, tell me what the environment has been like post weinstein. i'm getting questions about why there are so many accusations coast guard out now. my sense is perhaps women, other victims who felt like they wouldn't have been believed in the past are now feeling like now people are listening now people are believing and perhaps feeling that they have an obligation to add something to this conversation is that the sense you get as you and your staff are reporting this hour? >> definitely. absolutely that's what we get we're getting many women contacting us. as we've seen before, when women come forward with stories they wouldn't be believe with men in positions of power look at the white house and see how that played out.
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but with the harvey weinstein scandal and things that came out subsequently, women felt empowered to come forward. they understand to be believed and stories to be heard. i think that's why we're seeing so many stories now. this is really just the tip of the iceberg. there's honestly more to come. >> debra, if you're a media company, if you're an executive, what should you do to prepare for iceberg that's coming. do you hold meetings, have discussions, ask for more information in advance >> i think you actually have to look at your policies, talk to human resources and make sure they have created an environment where women feel empowered to come forward and not going to be reparations for them, careers will be saved. i think what we've really seen in a lot of instances does it really come down to men in positions of power saying do this or you'll lose your job, you'll never work in this town again. the companies have to look within themselves to make sure women feel like this is a place where they can come forward, tell the story and won't have to lose their jobs or won't have a negative impact on their
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careers. i think obviously there are a lot of men out there really worried right now about how their behaviors are taken. companies looking at themselves to make sure they have the right policies in place. >> finally debra, we've seen so many changes in talent across the spectrum, morning broadcast, prime time cable have we learned enough at this point to determine what changes in ad revenue may have happened or may be happening because of these talent changes >> that's a good question. i think we're just starting to see the ramifications of that. looking at shows like "transparent" really important for amazon, house of cards for netflix and "today" show is important for the respective network. we haven't seen the advertisers go away. interesting to see what happens with viewers if "transparent" returns, house of cards, and the news programs that are so important to their network we've only just seen the beginning of this.
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>> debra, we appreciate you sharing whatever you can with us today. thank you very much. debra birnbaum executive editor for tv. >> back to headquarters. sue herera has a news update for us sue. >> good morning. here is what's happening this hour british prime minister theresa may meeting her counterpart during a visit to baghdad. the uk government announced in september that an extra 300 troops to anbar province to help train iraqi forces. pope francis meeting in myanmar after he addressed a huge crowd in the predominantly buddhist nation. he urged the long suffering ethnic minorities to resist revenge for the hurt that they have endured espn is eliminating 150 production and technical employees. the layoffs, which were announced this morning in a memo to employees, does not include on air talent.
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espn laid off 100 employees in april. disney's marvel studios releasing much anticipated avengers trailer this morning. the film set to hit theaters in may. in the trailer, the film's villain tells avengers, quote, in time you will know what it's like to lose he's played by josh brolin that was my best imitation that's the best i could do the news update this hour. back downtown to you guys. i feel like i should break into an evil laugh but i can't pull that off either. >> you're not evil so you can't do that. >> probably wouldn't work. thanks, sue herera markets are closing in the uk and across europe, mostly higher for a second consecutive session. financials had their best day since late september following yesterday's comments by fed chair nominee powell on easing bank regulations volkswagen one of germany's big gainers after ceo projected record sales for the year, closeout 2017.
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the pound, two-month high on the dollar against reports uk has, in fact, reached an agreement on brexit divorce payment to the eu which some say would be worth 50 billion pounds we'll have to wait and see. >> yeah. as we head to break, looking at shares of luxury retailer tiffany, the stock slipping despite a beat on top and both bottom line. talk to investors, not only is bitcoin here to stay, eventually it will hit 1 million per coin "squawk alley" back after this alerts -- wouldn't you like one from the market
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. markets coming off the highs of the morning, nasdaq on pace for the worst day since about august 17th. the dow and s&p did set record highs this morning meantime bitcoin crossing 11,000 for the first time just a few hours after topping 10,000 more on this, let's bring in formula capital managing director and chess master and spencer bogart guys, good to have you with us. >> thanks for having me. >> bitcoin poorly misunderstood. we're trying to understand the phenomenon it's become what's your overall take, price action change, future of its use in american business >> so that's two questions i think day by day, who knows. for bitcoin, they are adding 100,000 new customers a day. what do each one of those 100,000 customers do, they buy
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bitcoin. that's driving demand up on a daily basis. overall long time, 250 million crypto currency, but 200 trillion dollars for demand for money. if bitcoin is solving the problems of paper and currency, which i believe, you're going to see that 200 billion start to move up to 200 trillion. this price action, who knows day by day this price action is certainly not unreasonable and will continue to go higher. >> just to follow up, back in august when bitcoin was around 4,000, you wrote, correct me if i'm wrong. we're in a hype bubble doesn't mean they are bad, shouldn't by but we've seen this story twice before in the past 20 years, et cetera. >> yes there are so many bogus crypto currencies out there 95% of these alternative currencies are probably scams. bitcoin is not one of them bitcoin is legitimate. it's the biggest one, been
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around the longst. just like every innovation scammers and ponzi schemes get in the game. that's happening have you to be careful the boit coin trend is not going to stop. >> spencer, you obviously believe in bitcoin, clearly. do you think we need derivative bitcoin products to help legitimacy or help others be able to play in bitcoin, futures, etps, exchange rate of products what do you think about those ideas. >> we hear a lot is bitcoin in a bubble reality is institutional ownership is 0% at this point. we need familiar like futures, etps to put it in a context traditional investors can touch. on retail side less than 2% own bitcoin, but they say they prefer to stocks. >> let's just add, jpmorgan, jamie dimon was trashing bitcoin a few weeks ago.
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now they just announced they are going to help their clients get into bitcoin futures, which is a derivative product certainly they see there's opportunity there. that's a huge retail investor base that's going to start playing around with bitcoin with derivatives. >> do you need it to be transactional for more retail investors to get in, to want to get in, to understand it does it need to be a currency? >> i agree with you completely notice amazon just registered three or four domain names completely related to crypto currencies, largest retailer in the world. they are going to start accepting bitcoin and everyone will follow after that. >> i completely disagree i don't think it needs to be transactional. they see it first, think crypto currency payments, buy for digital goal people don't like depreciating assets. amazon will not start accepting bitcoin. it doesn't make sense for them they don't like to spend bitcoin. >> nobel prize winner bitcoin is successful only because of it's
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potential circumvention, lack of oversight, so seems to me it ought to be outlawed what is the risk of real regulatory pressure for complete legality. >> let's not forget what large entity wants to make large transactions around the world in secret the u.s. government. believe it or not, the u.s. government is heavily looking into how they can personally or institutionally use bitcoin to spend. there will be regulation, so many scams as you point out. regulations are going to protect people bitcoin itself is a trend that's going to continue. >> spencer, tell me what are the fundamentals that you look at with bitcoin this is a piece, one of many pieces i can't figure out. besides demand, which can go in lots of different directions, especially if the public rushes in people get scared for a certain reason like they get excited what are the fundamentals driving bitcoin. >> that's fair
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any time we have math or economic uncertainty people rush to that risk off trade, gold, bitcoin. bitcoin has been a benefactor in that respect i think the transaction value is another important metric out there of how much value is flowing over the network on a daily basis. how much are people trusting the network with how many billions of dollars. >> i still can't figure out why it would be a surprise if bitcoin dropped to $1,000 per bitcoin as quickly as it's gone up to $11,000 from $1,000. it would make sense from demand. >> even if it happened, bitcoin lost 85% of its value today, it would still be up more than 40% on the year. >> and if a long-term trend is going to much, much higher prices, short-term volatility is not going to matter. it's long-term trend here that's important. the fact it does solve huge fundamental problems like infinite minting, forgery, privacy. many problems bitcoin solves on
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fundamental level that investors and governments will need. >> finally we covered dimon's comments heavily when he called it a fraud john mcphee, for whatever it's worth predicts a million dollars by 2020. do you have targets? >> i'll say a million dollars by 2020 as well easily. >> seems reasonable. not putting out targets. seems reasonable as with technology shifts let's think about what young people are doing. 32% of people say they prefer bitcoin to stocks. 42% of millennial males say they plan to purchase in the next five years we're barely in the first inning. >> let's say there's 15 million millionaires around the world. all their financial advisers are going to say, hey, buy a bitcoin. you need some exposure there's only going to be 21 million bitcoins minted ever in history. that's going to also drive demand. >> james, spencer, we're going to keep covering it. >> let's do it. >> thank you very much. >> thank you. still ahead jon's exclusive
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with amazon's most profitable unit down a touch more to up 52 points rick, what are you watching? >> i'm watching the pound. i'm watching ftse. the british markets are acting reasonably well. is there a breakthrough on brexit, there seems to be. we're going to discuss another side to brexit, status quo versus change, after the break
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i'm scott walker coming up
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today top of the hour on halftime report, today's big tech rollover, chip stocks, high-flying sector about to fall out of favor with investors. we'll discuss and debate taking on congress over the provision we've told you about and the tax plan that could hurt investors. what that firm just did to try to protect you the battle over roku sure to get fiery. short seller versus analyst who says the stock will go to 50 a live debate. at&t shareholders with a rare chance to hear from ceo randall stevenson today exclusively on halftime starts top of the hour carl, we'll see you in a bit. >> sounds good, scott. thank you very much. get to cme group and santelli exchange hey, rick. >> good morning, carl. when it comes to brexit, june 3rd, 2016, 10 years from now the brits are going to look back on that and either have a very big grin or be a bit unhappy i think it's going to be very
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binary, either big grin or big frown. i personally think it will be a big green. let's see what the market thinks the reason we're talking about this, unlike the words voiced by the head of the bank of england mark carney yesterday morning that things just didn't seem to be working out with regard to brexit and divorce papers, a u-turn occurred. it certainly seems they are penciling in what will ultimately put forth some movement on the whole brexit scenario come this december, which is just right around the corner let's look at two-day pound versus the dollar. pound definitely looking pretty good as a matter of fact talking about on cnbc all day, best levels since 28th of september on closing basis look at two-day pound versus euro very similar. two-day pound versus yen, very similar. now, it isn't all rosy news. if you look at the day before the brexit vote, the 22nd of june and pound versus dollar, the pound hasn't recouped. if you look at what's going on
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with the ftse 100 since the 22nd of june 2016, it's doing pretty well is it on ties like our market, no but higher for the year and much higher for that day. ultimately what this is a lesson is is the road less traveled ten years basically after our credit crisis response, we now saw janet yellen this morning move the markets a bit she's very excited about the economy. hey, it's u.s. economy and it's 10 years counter-factuals are a tough thing. it's hard to go back and say if you'd done this a little different, that a little different, that's why i'm so excited about brexit because you know what, this is the living counter-factual this is about acountry who too the road less traveled, voted for something that was not good in the here and now. it upset the status quo all for the notion of change even though it's a tougher road and everything about the brexit vote made life tougher for a while in the uk, ultimately the
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macro view of their economy might be infinitely better and it will be a case study of how to attack various problems make it easy, give up the downside for less upside or do what you think is right economically for the picture. jon fortt, back to you. >> thanks, rick. coming up, the ceo of amazon's most profitable unit, amazon web services making some key announcements today. we're going to discuss the stock impact, plus what he told me exclusively about working with jeffez quk ley" is back after this the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence.
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stocks up the highs of the day after setting new records this morning the nasdaq having its worst day since guaust 17th. "squawk on the street" will be right back
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amazon web services reinvent conference is under way and ceo andy jassy is delivering his keynote. i sat down with jassy and asked him about working with jeff bezos. is a years ago before he started aws, jassy was bezos' technical assistant. take a listen. >> one reasons why he's not the same today as he was when i first started working with him, you know, in that chief of staff role 16 years ago is that he's an incredible learner himself. i mean, he's really -- he has strong views, and he comes in with views, but he's a really good listener to the people in the room, and he is able to evolve his opinions. >> let's discuss the amazon announcements we've gotten so for with tech analyst michael graham michael, good morning. >> good morning. >> stocks not performing so great today, but a lot of people wondering how much amazon is going to push into machine learning and how important that
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is and what they really need to say and push in order to give people confidence that there's more growth ahead. what do you think? >> yeah. we are seeing a bit of a rotation out of internet stocks and tech stocks in general today, and amazon is participating in that. you know, i think the really interesting thing to come out of the aws summit this week is more what wasn't said than what was said you know, we got some product announcements, but i would characterize them all as, you know, incremental. nothing really earth shattering in the product announcements there were good customer wins that were announced but the biggest takeaway that we had that there weren't any big price cuts announced, and that's really important because this cloud services market is in some ways a three-horse race between microsoft, google and amazon, and both microsoft and google by our estimates grew their cloud businesses more quickly than amazon did in q3
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you know, amazon is a lot bigger than both of those, but the idea that amazon can sort of power through this market without a lot of price cuts is important >> michael, a couple of things jassy said that caught my ear. one was that he's planning on doing a lot more m & a, though they haven't done much in the past, and, two, that we should expect to see them layering on some software and services on top of that core infrastructure product, and i would expect if those were patterned after some of the competitors that could add profitability on top of what they have already got. do you have all of that in your model already, or is that something that tweaks how you look at aws? >> you know, for the most part we look at the margin structure at aws as being, you know, highly leveraged it's a fixed cost type of business, and when -- and when revenue does well, all that incremental revenue tends to fall to the bottom line. the aws operating margin in q3 was pretty strong at 26% which
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is what we're modeling for next year also. you know, that's a huge profit margin compared to amazon in general. we estimate that aws is going to be over 60% of amazon profits for the next several years, so when amazon talks about doing some m & a and layering in some more software services, you know, it's really just incremental revenue. they spend the money on the aws infrastructure, on the sales effort to go ahead and get that penetrated into customers, and then if they can layer on additional sales, you know, upsales or cross-sales to new types of products to those customers, it's really highly profitable and should make, you know, our long-term margin estimate seem, you know, fairly conservative >> and if you're an investor who wants to invest in cloud growth, quickly if you can is amazon your top pick, or do you expect, as you mentioned more growth stock-wise from the other cloud players as well as
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just profit and revenue wise >> you know, we look at aws as something that helps amazon. i still think amazon at its core is an e-commerce business evolving into household services business. >> all right. >> but, yeah, it's important. >> had to do it quick. got to leave it there. michael, thanks for joining us on amazon. >> let's go over to "the half. back at hq and welcome to "the halftime report." i'm scott wapner our top trade this hour, the tech wreck and what today's big selloff in that sector could be telling us about where the market could head next with us for the hour today, jim lane ial, steve weiss, pete najarian and carrie firestone, the ceo of arias asset management and michael farr, and we to want to be


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